Avenue Supermarts

D-Mart as it is more popularly recognized in probably today one of the most followed stocks on the bourses. After the jaw dropping response which it received for its IPO and mind boggling listing, naturally, its results are a big draw. And on a YoY, it did not disappoint.

The company ended the quarter with a 40% (YoY) rise in total income at Rs.3120 crore and a net profit of Rs.97 crore, up 49%. Sequentially, it was down 36%.

And for FY17, consolidated net profit was at Rs.48o crore v/s 320 crore, up 50%. Its equity stands at Rs.624 crore and EPS stands at Rs.8.49 (FV of Rs.10).

Avenue Supermarts, 91.36% owned by ace investor Radhakishan Damani and family, runs 118 food and grocery stores, under ‘DMart’ brand, covering 3.6 million sq.ft. retail space, mainly across Western India, with ~75% stores concentrated in Maharashtra and Gujarat. With USP of value-retailing, most of its stores are owned, unlike organized competition operating on leased premises, giving the company savings of nearly 7-8% of sales as lease rentals, a key edge over peers, mainly Reliance and Future Retail, in the listed space.

The object of the issue was repayment of debt / NCDs worth Rs. 1,080 crore over FY18-FY20 (Rs. 625 crore in FY18, Rs. 320 crore in FY19, Rs. 135 crore in FY20) and construction and fit outs of new stores covering 2.1 million sq.ft., over FY18-FY20. This means that in Fy18, we could see a substantial drop in interest outgo from the current over Rs.120 crore.

The IPO was priced at Rs.299 and it got listed on the BSE at Rs.604.40, a jaw-dropping 102% upside listing! It continues to trade almost 4 times higher than IPO price at over Rs.800 levels.

The IPO had received an overwhelming response – it was subscribed 104.59 times; the issue was for Rs.1326.70 crore and it received bids totaling Rs.1.38 lakh crore. This also goes on to show that if there is a good issue, rightly priced, there is so much money which can chase it and make it into a super success.